Core Insights - The SPDR S&P Regional Banking ETF (KRE) is a passive investment solution focused on the regional bank segment, offering thematic exposure to investors [2][7] - Launched on June 19, 2006, KRE has approximately $3.4 billion in assets under management (AUM) and tracks the S&P® Regional Banks Select Industry Index using a modified equal-weighted approach [3][8] - KRE provides diversified exposure with a bias towards mid-size regional banks, featuring an expense ratio of 0.35% and a dividend yield of about 2.40% [5][8] Fund Profile - KRE is categorized as a sector equity fund, specifically targeting the U.S. regional banking sector, and is sensitive to local credit cycles [7][8] - The fund has a standard deviation of 26.11 and an annualized volatility of 31%, indicating higher risk compared to the S&P 500 [14][13] - KRE's top 10 holdings account for 20.09% of the total, with an average market cap of $8 billion and a P/E ratio around 12x [19][20] Performance Metrics - KRE's 1-year total return is 0.32%, while its 5-year total return is 71.87%, indicating variability in performance [15] - The fund's performance over the past 5 years is better than its peers, but it has underperformed in the 1-year and 3-year periods [32][15] - KRE has a dividend growth rate of 2.28% over 5 years, which is lower than the median for all ETFs [6][33] Market Context - KRE is strongly correlated with the sector's average net interest margin and benefits from a steepening yield curve during Fed rate cuts [8][10] - The ETF is often used as a proxy for the domestic banking cycle and credit sentiment, with high short interest indicating its role as a hedging vehicle [16][12] - The fund's exposure to Non-Depository Financial Institutions (NDFI) loans has increased, impacting expected EPS growth and net interest margins [21][22] Comparison with Peers - KRE has a higher AUM of $2.87 billion compared to KBE's $1.43 billion and KBWR's $48.48 million, making it the most liquid among its peers [30][35] - All three ETFs have the same expense ratio of 0.35%, but KRE has a higher turnover rate of 42% compared to KBE's 22% and KBWR's 17% [37] - KRE's dividend yield is 2.72%, slightly higher than KBE's 2.64% but lower than KBWR's 2.87% [33]